NEAR Protocol Faces Critical Resistance Test Amid Bullish Sentiment

NEAR Protocol [NEAR] is currently trading at $2.13, facing a critical retest of a descending trendline resistance after forming a double bottom at $1.85. This technical pattern often indicates trend exhaustion and potential reversal, especially when accompanied by increasing trading activity. For a bullish confirmation, NEAR must decisively breach this resistance level. Failure to do so could invalidate the reversal thesis, leaving NEAR vulnerable to further downside. The next few trading sessions will likely confirm the direction of the trend.

On the 4th of July, trader positioning on Binance revealed a lopsided sentiment with long accounts dominating at 72.19%, pushing the Long/Short Ratio to 2.60. This reflects aggressive bullish speculation that NEAR will soon break above the descending resistance. However, when optimism becomes crowded, it often leads to liquidity risk. If the price fails to break out, this overleveraged structure could cascade into forced exits.

Weighted Sentiment, according to Santiment, climbed to +0.427 after days in negative territory. This rebound shows that trader confidence has returned—at least temporarily. Historically, sustained positive sentiment has supported upside moves, but short-lived spikes often lead to reversals. Thus, sentiment must stay elevated to sustain momentum. If it dips again while the price remains flat, it may confirm a local top.

On the 4th of July, Funding Rates on Binance flipped to +0.01%, meaning longs were paying shorts. This supports bullish momentum, but the size matters. The rate is still modest, suggesting healthy positioning rather than excessive speculation. However, funding may rise further if longs continue to pile in without a breakout, risking a squeeze. Therefore, this data currently supports cautious optimism—but traders should watch for rapid spikes that may foreshadow exhaustion.

NEAR saw a net outflow of $2.22 million from exchanges on the 4th of July, signaling that investors are withdrawing tokens from centralized platforms. That’s often interpreted as holding behavior rather than intent to sell. If this trend persists, it reduces near-term sell pressure and builds a stronger base for breakout attempts. However, a sharp return of Exchange Inflows would weaken that case.

Despite rising optimism, liquidation data shows that long positions suffered losses of $269.99K on the 4th of July, compared to just $6.19K in short liquidations. This imbalance suggested that bulls may have jumped in too early, only to be caught in a local pullback. While not catastrophic, this liquidation event highlights fragility in the current uptrend. If similar imbalances occur again, it may erode confidence and delay breakout attempts.

NEAR’s bullish reversal setup was backed by strong sentiment and aggressive long positioning. However, elevated liquidations and unconfirmed breakouts signal caution. A breakout above the descending trendline with continued spot outflows and stable funding would strengthen the bullish case. Until then, the market remains in a critical decision zone.